- 17 -
v. Commissioner, 66 T.C. 141 (1976), the taxpayers had elected
income averaging under the old version of section 1301, and
respondent determined that the taxpayers were additionally liable
for the minimum tax under section 56. This Court held:
respondent argues that the tax imposed by section 56 is a
separate, self-contained provision which is distinct from
the tax imposed by section 1, and that sections 1301 through
1305 are, on their face, not applicable to the computation
of the tax imposed by section 56.
We agree with respondent. Congress enacted the minimum
tax on tax preference items in the Tax Reform Act of 1969 in
order to reduce the scope of certain existing tax
preferences, including capital gains. The tax imposed by
section 56 is specifically stated to be "in addition to the
other taxes imposed by this chapter." Sections 56 through
58 appear to be a self-contained unit of taxation, whereas
computation of the tax imposed by section 1 may involve the
application of several other Code sections. The deductions,
exclusions, and credits allowed in the computation of
section 1 tax may not be utilized in the computation of the
tax imposed by section 56 unless specifically provided.
Sections 1301 through 1305 do not provide a mechanism
by which the minimum tax on tax preference income may be
averaged. Section 1301, on its face, has reference only to
the tax imposed by section 1. In our opinion, if Congress
had intended to allow income averaging in the computation of
section 56 tax, it undoubtedly would have said so. We are
unwilling to imply such an intent on the part of Congress.
[Id. at 144.]
The Court, therefore, sustains respondent on this issue.
Petitioner also argues the meaning of the term "regular" tax
in section 55(a)(2). As noted earlier, the AMT applies to the
extent (1) the tentative minimum tax exceeds (2) the regular tax.
Respondent determined that the "regular tax" in the AMT
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011